Hungarian and Czech output plunged in August on a set of factors including a holdup in the previously thriving automotive sector, after a few very promising months of accelerating industrial production.

Hungary’s industrial output surprisingly slowed on the year and even plunged versus the previous month as exports slowed and domestic demand contracted, preliminary data published Tuesday show.

Czech output also dropped, contrary to expectations for mild growth.Czech August industrial output declined 5.2% on the year in August, compared to analysts’ expectation of 2.9% growth. Hungary’s output rose by just 0.5% on the year, versus analysts’ forecast of 11.6%, while the monthly figure was down 5.7% on the month, the largest monthly drop since December, 2010.

In the Czech Republic, car production declined due to holidays and retooling at key car makers, while Hungary saw one of its main automotive companies halting output altogether in August due to earlier overproduction. Read More »

KIEV, Ukraine–Valeria Gontareva, the former investment banker who now runs Ukraine’s National Bank, has taken a lot of heat for imposing restrictions on sales of dollars, part of the regulator’s efforts to stem the plunge in Ukraine’s currency, the hryvnia.

Locals complain with hard currency hard to find, few banks allow customers to buy even the $200 a day allowed under the current rules.

Monday, Ms. Gontareva took a group of colleagues and reporters to a bank branch in downtown Kiev – perhaps ironically, it was a branch of Russia’s state-owned Sberbank – to prove dollars could
be bought.

With Russia’s currency sliding to fresh lows and no sign of a let-up in fighting in Ukraine, President Vladimir Putin is breaking with tradition and getting away from it all on his birthday Tuesday with a trip to Siberia. The visit to the forests of the Siberian taiga will be the first time in more than 15 years that nature-lover Mr. Putin has taken a vacation on his birthday, Kremlin spokesman Dmitry Peskov told state news agency TASS. Read More »

Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto signed a cooperation agreement with the German-Hungarian Chamber of Industry and Commerce in Budapest earlier this week.

MTI/MTVA Lajos Soos

BUDAPEST–Hungary rejected on Friday suggestions that it’s weakening democratic values and limiting civil society freedoms after a top U.S. diplomat made comments interpreted as criticism.

“How can you sleep under your NATO Article 5 blanket at night while pushing ‘illiberal democracy’ by day; whipping up nationalism; restricting free press; or demonizing civil society!” U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland said in a speech on Thursday at the Center for European Policy Analysis.

“I ask the same of those who shield crooked officials from prosecution; bypass parliament when convenient; or cut dirty deals that increase their countries’ dependence on one source of energy despite their stated policy of diversification,” Ms. Nuland added. Read More »

There can be only…five, a Hungarian central bank official says about major universal banks remaining standing after the conversion of foreign-currency loans.

EPA

BUDAPEST–Hungary’s banking sector may see further consolidation that will leave a handful of large banks operating in the country and some foreign banks out as a result of government-mandated conversion of foreign-currency loans into the forint, set to take place next year, a central bank official said Thursday.

An upcoming government push for more competition will likely leave no more than five major universal commercial banks, central bank managing director Marton Nagy said. Banks providing niche services and savings cooperatives bank Takarekbank would also survive, he added.

“A mad fight could start for customers, especially the premium ones, and [bank-sector] market shares may look totally different after the conversion,” Mr. Nagy said at an economic conference of online news agency Portfolio.hu. Read More »

A mounting structure being implemented – not budget measures but modern art.

MTI/MTVA Gyula Czimbal

BUDAPEST–Hungary needs to implement further structural measures so its public debt declines in a sustainable way and the country avoids the resumption of the European Union’s strict budget surveillance, the European Commission said on Wednesday.

Hungary’s public debt has been the highest in central Europe as a percentage of gross domestic product for many years. It totaled 85% of GDP at the end of June, the central bank said Tuesday.

The measures and factors outlined by the Hungarian government to bring public debt down by year-end “cannot be a substitute for genuine fiscal consolidation efforts in order to put government debt on a firm downward path,” the commission said in a report that took into consideration data available by Sept. 4. Read More »

Central Europe’s manufacturing activity was mixed in September, going strong in the Czech Republic and Hungary but still declining in Poland reflecting varied domestic demand and ties with key export markets across the region, data showed Wednesday.

Purchasing managers’ index, or PMI, figures showed that manufacturing grew last month in the Czech Republic and Hungary, while it contracted in Poland. Read More »

German and Czech officials met Tuesday at the German embassy in Prague to mark 25 years since thousands of East Germans sought refuge at the then-West German embassy in the historical center of Prague.

The event of September 1989 helped weaken the totalitarian regimes in Eastern Europe just two months before the fall of the Berlin Wall.

“The unwavering will for freedom, and the courage people had to leave everything behind, to this day are deeply impressive,” German Foreign Minister Frank-Walter Steinmeier said of the event. Read More »

The National Policy Institute says “They will fail. We will persevere. The conference will take place.”

NPI website

BUDAPEST–Hungary wants to ban a conference, scheduled for later this week, of the U.S.-based National Policy Institute, which the Central European country’s government considers extremist and racist.

Hungarian Prime Minister Viktor Orban ordered Interior Minister Sandor Pinter on Sunday to use all legal means at his disposal to prevent the conference, scheduled for this weekend in Budapest.

“Ever since [it came into power in] 2010, this government has been the strongest bastion against any form of extremism in Hungary and also in Central Europe,” Zoltan Kovacs, Hungarian government spokesman, told The Wall Street Journal on Monday.

“We oppose this conference from every aspect,” Mr. Kovacs added.

The NPI said it is disappointed and puzzled by the Hungarian government’s action and that it will obey the laws of Hungary. Much about the event “might have been ‘lost in translation’ or, … [Hungary] is responding to untruthful messages sent by those who oppose the Congress as well as the very notion of traditional identity,” the NPI added. Read More »

Apples are one of the Hungarian produce most affected by the Russian trade ban.

MTI/MTVA Zoltan Mathe

BUDAPEST–Hungary’s economic growth and inflation may slow moderately as a result of the deepening conflict between neighboring Ukraine and Russia, the Hungarian central bank said on Thursday.

Due to lower Hungarian exports to the two countries engaged in conflict that has seen demand from them fall, as well as the negative impact of Russian trade sanctions on Hungary, Hungarian gross domestic product growth may slow by 0.2 percentage point this year and 0.4 percentage point next year, the central bank said in its quarterly Inflation Report.

The National Bank of Hungary expects this year’s GDP growth at 3.3% and next year’s at 2.5%, including the impact of the conflict. Read More »

About Emerging Europe

Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.